That’s it, it means typical. But oddly that term has come to imply bad, or not good enough. Why would you just want to be Average?? Average is awful.

I’m sitting here writing this in a coffee shop in Omaha, Nebraska, the day after the Berkshire Hathaway Share Holders Meeting. Yes, they refer to this event as the “Woodstock of Capitalism”. During the first weekend in May, people from all over the globe descend on middle America for a weekend, hoping to get a glimpse into the mind of arguably the most brilliant investor ever.

The event consists of a “Shareholder Shopping Day”, in which all the subsidiaries of BRK sell their wares at a discount. It’s almost overwhelming the variety of goods available, everything from chocolates, ketchup and ice cream bars to trains, mobile homes and private jets. It’s an impressive assortment of companies.

The following day is the Main event, the shareholder meeting. After waiting about an hour to get into the main arena in downtown Omaha, we get in and grab our seats. It consists of a movie put together by Berkshire, poking fun at itself with a variety of special guests.

Then the true fun part. Warren Buffett and Charlie Munger take questions from the press and the audience about Berkshire’s strategy or anything else really. It’s a free-for-all of questions. And it’s impressive, an 88 year-old and a 95 year-old sit on stage and get peppered with questions for about 6 hours. And every time they have insightful and entertaining answers to the questions. Mostly, it’s Buffett answering questions thoughtfully and Munger throwing in one-liners, but the wisdom they dispensed is priceless.

One of the answers that really stuck out to me, and it’s something that we’ve been struggling with for a while.

The question went something along the lines of:

Hershey’s and Mars are huge. Have you ever tried to grow See’s candies into a major competitor to them?

Yes, we’ve thought about that and tried. It’s hard, those guys are good at what they do. But why do we really need to make the biggest candy company in the world? See’s has been a fantastic investment, and it generates enough cash for us to pursue other opportunities.

Of course, I’m paraphrasing, but the point stands. Why do you need to be world leading?

And the reason I bring this up, is that with Mrs. Wow’s company, or this blog, or my career I’ve been doing a lot of thinking. At what point to we need to continue beating ourselves up?

When is enough? What is good enough? Is average just fine?

Buffett is famous for touting the benefits of index investing. But what types of returns do you get from indexing?

Average.

By definition you get average returns, because you own everything. Some are good, some are bad. So, they come to some level in the middle, and that level is average.

Community

So Jim Rohn famously said:

You are the average of the 5 people you spend the most time with.

Now, I don’t know that it’s five, or more people. But I can’t help but think there is some truth in this.

For instance, over the course of the last 3 years (yes, this thing has been going for 3 YEARS!?!?!) We’ve become good friends with several people in the FI community. This includes bloggers, and podcasters, but also plenty of people that are not content producers.

But, who would have thought that we would be able to count so many unique and interesting people in our group of friends.

I’m almost getting teary-eyed just thinking about it sitting here in a brewery in Omaha. (Yes, we moved… coffee shop to brewery. Would you expect anything less?)

If I am even below the average of the people I hang out with, I’m a way better for it. The people that I have met through this community are pulling me along for the ride.

So, now knowing that Buffett and Munger are comfortable being average, makes me realize that I’m blessed to be associated with so many people that bring me up to the average.

I’ll pose a question to you:

Are you average? Are you comfortable with it?

The Brewery

An Aside: Who I associate with most…

Anyone who reads this blog should know the answer to this:

Mrs. Wow.

I’ll warn you I’m going to gush a little for a bit. So, if you’re not interested, just skip to the comments…

But, how did I end up with such a great partner?!!? She’s beautiful, intelligent and driven. (And also, she’s not going to read this until 3 weeks after it’s published ;)).

Some of you may not know.. but when this comes out we’ll be on our way to celebrate 5 years of marriage in Belize, where we originally married. I’d say wedded bliss, but anyone that’s married knows that’s a complete fallacy.

Alas, she makes me a better person. I’m happier (when she isn’t driving me nuts), smarter and more even keeled just having her by my side.

well, congrat’s on the 5 large years. you win the game if you find somebody who will be nice to you. i still buy individual stocks and try and beat the average but i am clearly misguided and probably should ride a short bus to work.

i was thinking about public versus private companies. let’s say you owned a coffee shop outright and it was profitable and popular. you, as the owner make a theoretical 75,000/year profit. you have the opportunity to open a second location using some of your cash flow but for a few years expect the combined businesses to generate “only” 120,000/year and not double the amount of the already established shop. as an owner only you would certainly take the extra 45k, but if that shop was public they would probably be punished for diluting earnings per share for a period. reminds of a good reason not to take on some of the big boys in candy and just cash those profit checks.

So, I think that’s the exact way they were looking at it. Since Berkshire is a holding company, they could either take the profits and sink it back into the candy company or invest it elsewhere. They took the cash flow from See’s and invested it elsewhere and got a greater return than they would have otherwise. The way the company is set up allows that and makes it worth while.

The other question for the private coffee shop is this: “Is that additional $45k a year worth the trouble of running two shops?” And that’s where it gets interesting. And what we are running into now. We could easily grow the company, but to what end? Is the additional effort going to provide enough marginal return? Or are we happy with where it’s at? It’s an interesting question. We have no investors or shareholders to please other than ourselves.

Great post. This mindset can be huge for life, and help avoid taking on additional stress. When you truly figure out what is “enough” for your life, you don’t need to put all this energy and effort into making something that’s already working even better (ie. Investing in index funds, not taking that director role in your job, only buying a couple rental properties, etc)

I remember my dad went to the Walmart shareholders annual meeting and got to stand up and ask Sam Walton a question. It definitely made him feel above average! My wife and I wil hit 41 years of marriage this month, and it’s even better than it was at year five. You guys are destined for a wonderful future! Great post.

Overall I’m average (most of us are), below average in some things and above average in others. As a culture we’ve become so obsessed with growth, being the “best” & too much competition that I feel like the rate of aneurysms are bound to skyrocket because some folks are wound so tight.

It’s good to be like Buffett and choose to be above average where it counts the most for you.

Since I work in tech, and work with data and stuff. I always like to say to people, “Despite what your mom says, you’re average.” Meaning, if you can’t figure out our site, no one else can either. Or if you won’t use it, no one else will either.

I think competition is good to an extent. It needs to be a cooperative competition. Symbiotic if you will. It will push everyone to get better, but there is a limit to the marginal returns… and that’s where it gets tricky.

Seth Godin wrote a great book called “The Dip” that discusses when to push through and when to cut your losses. It’s interesting, because where is that balance? When is enough enough?

Yep, the normal distribution is what most can expect (with some “fat tails”, you mentioned you’re into data and clearly a Buffett fan so figured I’d throw that in).

Agreed about competition to the point of diminishing returns (wherever that is) is good, since healthy competition can lift the level for lots of people.

But yeah, getting into too much of that unhealthy competition and everything turning into a competition, without taking into account what’s important to you and what’s worth that effort can become dangerous and not a very good use of the limited time available.

Perfect recent example is getting my son ready for kindergarten and sitting around with other parents at a school while our kids were getting placement tests to figure out the right mix of students per class and seeing some very anxious parents waiting for their kids to return and report back on how they did. It’s kindergarten! I was just happy that my son went with the teacher without a fuss and didn’t seem at all nervous.

I’ve seen that Godin book, with the cover with “The Dip” drawing, but haven’t read it. Does it offer a good way to figure out the balance and what to cut?

Competition is great in certain doses. It makes us better, it makes us progress. But everything in moderation as they say. Like booze, or gambling, or anything else. There’s a dangerous side to anything.

What the hell is wrong with people? I agree with you … be happy your kindergartener is coloring on the paper and not the desk.

I haven’t read the book in a while, but most everything he writes is worthwhile. and The book is like 50 pages long, you can read it while waiting on the next kindergarten screening test 😉

To eat good food, to live in a comfortable home, to own a reliable car, to be with those I love and to work with clients who pay me well. These are all simply practical (and even healthy) things to have in a modern, everyday life. Not more…

In fact, it has been proven time and time again that after our basic necessities of life are met the correlation between having more and our happiness declines i.e. more doesn’t make you happier or give you a more fulfilling life.

“more doesn’t make you happier or give you a more fulfilling life.” This is something that we need to constantly remind ourselves. As we continue to strive to get to where we are going, we have to remember that once our basic needs are met, there is very little marginal return for the additional effort.

By identifying where I spent money then linking it my feelings at the time has shifted my perspective from seeking happiness to one of wholeness.

Wholeness simply means complete, lacking nothing, entire, undivided and uninjured. It evolves, gives and is regenerative. Wholeness “becomes” rather than “strives” and by default it naturally purges itself from impurities, through ones thoughts and actions.

But let’s not kid ourselves — See’s is very far from being an average business. Just look at the numbers. Sure, they might not win in volume of candy shipped, but everything else about the company is incredible.

Buffett got very lucky buying See’s when he did for as cheap as he did. Phenomenal business.

It’s quite a fascinating business case actually. Growth has been tiny, but the business has some pricing power — which has generated around 2 billion in profits (approx) over the years. Not bad for a $24 million investment. Not bad at all.

Just goes to show — you don’t need big growth to have a great investment.

Congratulations! Have fun in Belize. We visited once and loved it there. They have a really good retirement visa program the last time I looked.
I’m not sure if I agree with being average. My philosophy is you don’t have to be the best, just better than average. It’s not than hard to be above average because there are many many screw ups in the world.
But if you look at the average of people you spend time with, that’s a different story. You’re right. We should spend time with people who are better than us. That’s a good policy.

Trust me when I say, we’ve been contemplating it while here. This has been a great time and it reminds us how we all need to be refreshed after a while.

I’d agree with you… being above average is fairly easy. In fact, all you really have to do is put a little thought into something and you’re already ahead of about 90% of the rest of the world, as most of them just don’t think at all.

I always strive to be the dumbest one in the room, and then I can hope to be pulled along by the average.

I’m on the other end of the FIRE community. Retired at 63, my wife retired at 60. Invested all in individual stocks, while taking advantage of every deal my employer gave us. Liquid worth over 2 million, house is paid off, no credit card debt except what we spend monthly. Always pay off balances every month. Married 46 years. Living a comfortable retirement, and last year paid less than 1% in federal taxes. Congrats on your anniversary, may you look forward to many more….

Yes, but it took 30 years of steady investing. Some losers, some winners, as long as you hit 1 big winner you can be OK (Visa). Now if only Trump would stop roiling the markets. (Down 600 this Monday due to trade tariff tiff.)

I like your policy of not trying to one up yourself and other people all the time by being the best. The more often I go back to Thailand, the more I learn about buddhism, and the more I understand that true happiness doesn’t come from constantly trying to be the best. It comes from being satisfied with yourself and cherishing your relationships. I started meditating recently and it’s helped a lot with anxiety (trying to get a book out is HELLA exhausting and anxiety inducing). I’m hoping to keep it going and try my best to “be average”.